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Social Responsibility and Sustainability

Way beyond flying

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We assume our Social Responsibility through an ongoing commitment of contribution to interest groups via co​​ncrete and measurable actions, by emphasizing business sustainability and incorporating the three performance variables: social, environmental and economic.

Our Corporate Social Responsibility is expressed through a strategic management model ​which prizes:

Ethics

Social inclusion

Win-win relationships with suppliers, partners, clients/customers, the community and investors.

Download the sustainability reports from previous years (Available only in spanish):

In the social sphere, we have developed a plan intended to provide quality services to both passengers and users and, at the same time, we have been involved in public and private initiatives aiming at improving living conditions of the Latin American population.

Community

We are committed to helping children through the “Banco de Millas Avianca” (Avianca Miles Bank), where air miles contributed by us and passengers members of the LifeMiles, frequent flyer program are deposited with the aim of taking poor children who need specialized medical attention to various centers of excellence throughout the country and abroad.

Since the program’s inception in 2006 and up until 2015, more than 1,900 people have been benefited and 52,184,566 miles have been accumulated. In 2015, 248 people were taken to receive specialized medical treatments.

We form part of the “Niños por América” program, which is aimed at helping children of lower income families, who stand out for their behavior and academic excellence, to fulfill their dream of flying and knowing different regions in Latin America.

In the “Niños por América” program, the students begin their experience at the Airport through worships and recreational activities. Traveling children have the opportunity to know how an airline operates, how aircraft fly and other aspects related to the airline functioning. In 2008-2015, 2,839 children took part in the program.

Our “Avianca Solidaria” program is oriented toward moving humanitarian help and medical and rescue personnel. Transportation takes place through our passenger airlines Deprisa and Avianca Cargo.

From 2008 to 2015, more than 337 tons of aid has been mobilized throughout the region. Some of the most outstanding activities and aids include exemption of baggage payment, in-house activities together with contributors with the aim of raising donations, both in kind and cash, to help different social causes.

Through the “Yo Colaboro" program, we try to mobilize our human talent for them to donate part of their time, knowledge and energy in favor of the social development of communities where the Holding’s subsidiaries operate.

The voluntary work includes: health, education, environment, emergency attention and animal care & protection, as well as specific recreational activities and celebrations of special dates through which communities are benefited.

The commitment with the regions where we have a presence is crystalized through strategic alliances with leading organizations and institutions in the area of social, cultural and educational projects in Latin America.

Art and Culture

In addition to the five programs mentioned above, the Organization supports different initiatives related to the promotion of art and culture in the countries where its subsidiaries operate, with the aim of contributing to the protection and promotion of their heritage, the strengthening of national identity, and the development of art expressions.​

Avianca reiterates its full commitment to environmental care and rational use of natural resources, undertaking in its operations:

Cutting fossil fuel consumption.

Reducing greenhouse gas emissions and noise.

Reducing hazardous waste generation.

Implementing instruments to prevent pollution from their activities.

Complying with applicable environmental legislation and other environmental commitments.

Strategies and actions

Carbon footprint

We resolved to publicly account for the environmental impact of flight operations in terms of the amount of greenhouse gases emitted. In this way, we learned what to do in order to mitigate them.

We identify that 99% of CO2 emissions are produced by direct sources from Jet A1 fuel consumption in aircraft operations, while the remaining percentage is referred to other emissions produced by ground-based equipment and purchased energy consumption.

All airline industry’s actors have established a target: increase fuel consumption efficiency in 15% until 2020, from there grow neutrally in emissions and in 2050 reduce CO2 emissions 50% against 2005 emissions.

Improve fuel use

Currently the airline industry is responsible for 20% of total world CO2 emissions. Thanks to important industry investments, a decrease of this percentage is expected.

Aiming to streamlining general fuel consumption, we’ve designed and implemented new operations techniques developing strategies in order to reduce the aircrafts weight, and also actions to optimize routes distances and flight speeds.

Fleet addition

Avianca continues its revamping fleet process currently with five state of the art aircrafts’ families (Boeing 787, A330, A320, E190 and turboprop) with a 5-year average age, this equipment is highly efficient and environmental friendly and offer these benefits:

Less fuel consumption, and therefore less greenhouse gas emissions to the atmosphere.

Less noise emissions.

Use of composite materials that reduce the amount of hazardous waste generated in ground-based maintenance procedures.

Integrated management plan for conventional and hazardous waste

In this plan are the actions guidelines for each one of the actors involved with waste management in order to comply with applicable legislation and mitigate associated significant environmental impacts.

An example is the implementation of eco-friendly technology in maintenance procedures, such as solvents recirculation system for the Aircraft Wheel washing, which reduces the generation of wastewaters and optimizes the amount of chemicals used. This initiative is framed within a cleaner production.

Environmental Contingency Plan

Procedures aiming to prevent and attend events that can cause significant pollution of the environment.

Training collaborators in environmental care issues

This strategy aims to create awareness among our collaborators and provide them with enough knowledge to effectively manage the environmental impacts produced during the normal development of their activities and social environment.

In 2014, we implemented an induction program, an environmental unit for all our company’s collaborators using the Avancemos platform (E-Learning).

Development of Strategic Partners in environmental friendly processes

Including within the Strategic Partners model activities focused on supplies for environmental protection.

Recognizing our role as value drivers for the business and financial sectors, we economically aim to:

Regarding what was mentioned before, we rely on a Corporate Governance structure that allows us to guarantee a management exercise with righteousness to address the duties of stakeholders, investors, creditors, employees, clients and other economic agents.​

Results

At the close of 2013 business year, Avianca Holdings S.A. accounts showed an increase of 8,0% income growth, from USD 4.269,7 million to USD 4.609,6 million. Operational costs -excluding the fuel effect- increased 8,0%, from USD 2.683,3 million to USD 2.898,9 million. This value includes both operational growth and expenditures regarding fleet upgrading. In line with routes and frequencies increases, as in international reference prices, fuel cost went up to USD 1.325,8 million, 1,6% higher than in 2012.

Net income for the year 2013 climbed to USD 248,8 million, which shows an increase of USD 210,6 million compared to the net profit recorded in 2012. This result includes a net effect earning in foreign exchange of USD 23,5 million and shows the consolidation of the improvements implemented in the different markets where the company operates.

Market Share

Integrated airlines improve their markets positions

In order to offer more coverage and connectivity, in 2014 the Holding -through their airlines- increased seats offering for the international market via opening new routes, such as: Bogota - Cancún, San Salvador - Chicago, San Salvador - Medellín, and Bogotá - San Juan de Puerto Rico, among others. Also important adjustments were done for the local Colombian market offering, giving it a new impetus to the commercial and touristic dynamic of each country and the region.

As a result of strategies aimed at positioning the service in strategic niches and capacities adjustment, the airlines from the group recorded a passenger mobilization of 24’625.062 in the period of January-December 2013, which shows a 6.6% increase in travelers moved compared with 2012 - which amounted for a passenger mobilization of 23’092.533-. The ASK’s (Available Seats per Kilometer) climbed to 38,762 million, recording a 6.1% increase compared with the year before, amounting a load factor of 80.5%.​

Colombia, Peru and Ecuador local market share

From January to December 2013, the total number of passengers in Colombia, Peru and Ecuador local routes climbed to 14’292.302, recording a 7.8% increase compared with the number of passengers moved in those markets in 2012 (13’255.502).

International aviation market share

From January to December 2013, the number of passengers moved by the Holding airlines in international routes climbed to 10’332.760, 5.0% higher than the 9’837.031 passengers moved in 2012. The capacity measured in ASK’s grew 4.2%.

Strategic projects

Fleet upgrading

In 2013 the company through its subsidiary airlines continued fulfilling its fleet innovation strategy. In that period, 12 flight equipment were included: one Airbus A330-200, five Airbus of the A320 family, one Airbus A319, one ATR 42 and four ATR 72-600.

At the same time, and following resources optimization strategy and offering matching, one TACA International Airbus A320 was transfer to Avianca S.A.

On July an incorporation process of ATR 72-600 aircrafts began, that replaced the Fokker 50 fleet. The ATR72-600, upgraded with 68 seats, are the latest generation aircrafts that allow substantial improvements in comfort for our passengers, at the same time the company benefits of its high performance and of the significant efficiencies in fuel consumption and running costs.

For December 2013, airlines related to the Holding had 164 aircrafts belonging to the Fokker 50, Cessna, ATR42, ATR72, Embraer and Airbus families. From these, 150 were operating by the end of the period.​

Destinations, routes network and alliances

We strengthened the joint network using direct operations point-to-point and through links between own connection centers. In this way we accomplished the implementation of more than 4,865 flights per week to more than 98 destinations in 26 countries. The connection offer through five continents was reinforced with the offering of hundreds of destinations operated through trade agreements (code-sharing and interlining) with other international established airlines and also with the route network of the airlines members of Star Alliance.

​Connections centers

In 2013 we continued consolidating the three airlines passengers’ connections centers of the Holding in: Bogotá, Colombia; San Salvador, El Salvador; and Peru, Lima. Schedules and connection times enhancements between routes of one and other airline, resulted in a better occupancy and in the optimization of the users travel experience in routes that included different trips throughout the American continent to Spain.

Bogota, Colombia

The operation in the Bogota’s Connection Center amounted for 3,059 weekly departures to 24 cities in Colombia, 5 in North America, 10 in South America, 12 in Central America, Mexico and the Caribbean, and 2 in Europe, connecting hundreds of passengers of domestic and international flights with different destinations in these regions.

San Salvador, El Salvador

Using the San Salvador hub more than 725 weekly departures were operating from and to 11 destinations in North America, 6 in South America, 12 in Mexico, Central America, and the Caribbean.

Lima Peru

The hub located at Peru’s capital operates 527 weekly departures to 15 points in South America, 5 in Mexico, Central America and the Caribbean, 1 in North America and 9 domestic destinations.

​​Regarding Corporate Governance, the company kept active instruments aiming to guarantee that collaborators continue with the practice of corporative values and also for administrators exercising transparent management, which allow timely delivering of information to the market and accurate accounting records.

Greatest impact efforts for 2013

Adjustments to comply with the American stock market requirements​

As part of the process of the company’s registration before the US Securities and Exchange Commission- SEC, and issuance and placement of ADSs (American Depositary Shares) representing preferred shares listed on the New York Stock Exchange – NYSE, the Company adjusted the corporative structure to the requirements of these entities through these actions:

Reforms to the social contract to show the obligation of having the majority of the board as independent members under the required conditions.

Designing the Policy and anti-corruption program to complement dispositions within the Code of Business Conduct and Ethics and focused in complying to the Foreign Corrupt Practices Act (FCPA) and the applicable anti-corruption rules for the Company in the countries were the Holding firms operate. The lines of the Policy and Program to be adopted and disclosed include training the senior management and collaborators with an initial certification and an annual recurrent certification. The assigned responsibilities regarding surveillance, control and empowerment of the line of complaints are described there.

Strengthening communication processes with shareholders and investors, including an email where questions can be asked and also to request information related to management and company’s activities.

Holding quarterly results conferences with the participation of senior executive management, under the coordination of the Investors Relation Office.

Internal Control

The documentation for Risk and Control Matrices Processes with material impact on financial statements was submitted.

The methodology used is the one recommended by PCAOB (Public Company Accounting Oversight Board): Top-Down approach, lifting controls by entity until reaching critical Processes Controls based in materiality analysis that includes relevant subsidiary companies for the Holding.

General TIC’s control documentation and all the technological platform and systems that support critical business information was concluded. In compliance with the SOX Law, a lifting of segregation of functions matrices for SOX processes reach was carried out.

Also continuous auditing and monitoring of business key processes have been performed with the goal of ensuring a proper Internal Control environment of the organization.

Risk Control

The organization keeps working on the design of the Corporative Risks Management System (RMS) through identification, assessment, control and treatment of the different types of risks that can affect the company’s Strategic Goal, in order to protect the organization assets and support the achievement of the Business Goals.

The first stage of the RMS implementation concluded in 2013. In this framework, a Policy for Risks Corporate Management was designed, the first map of strategic risks was built, and action plans to mitigate critical risks was defined.

The process to standardize and align different methodologies and management risk types on which the organization relies began.

Code of Business Conduct and Ethics

On February 2013 Avianca Holdings S.A. adopted its Code of Business Conduct and Ethics which is applicable to all the organizations, including subsidiary companies.

In the Code are the values, principles and rules that guide the daily interaction within the organization and among its collaborators, and also with clients and general community, including obligations arising from local and international laws and regulations required for companies, and also for collaborators in each of the countries where they are located and offer services.

The adoption included an outreach program leaded by the Human Talent area supported by Communications and Report Line units. It focused in strengthening internal control tools put in place by the organization to address any concern, suggestions and also complaints and reports made willingly by senior managers, employees, collaborators, contractors, clients and third parties in general regarding proceedings that are considered or can be considered as unethical o against the law, or bylaws, or policies established by the organization.

The organization has an Ethical Line, managed by EthicsPoint, an independent firm to receive requests or reports treated as confidential. Through this tool they also can request orientation about Organization policies and procedures.

EthicsPoint works 24/7 ensuring the reception and processing of requests or reports which are made known to the Organization.